No sooner did we just get done detailing how the time to build wealth was passing millennials by quickly than we find out that Gen Z is also doing everything they can to prevent themselves from building wealth.
Notably, they're spending themselves into oblivion, a new Bloomberg report notes.
In fact, Gen Z is spending more now than they were before the pandemic. This is notable because Gen Z has less saved than older Americans, the report notes, meaning the increased spending likely hits their ability to build wealth over the long term harder than it would for other generations.
American Express Co. Chief Executive Officer Steve Squeri said on Friday: “We assumed there was such pent-up demand -- not only for travel, but such a pent-up demand for consumer goods -- that the U.S. recovery would be like it is right now.”
He continued: “When you look at your millennials and your Gen Zs right now,” they’re at “125% spending of what their pre-Covid levels were in 2019.”
The spending has been a boon for American Express, despite the company believing that corporate travel still won't return to pre-pandemic levels until 2023.
And to the extent that there is still a small space where the company can offer credit to literally anyone with a shred of a credit score, the company said it was considering a debit card - a risk for a company whose prestige and brand name carry its weight with its customers.
“It really didn’t work for us -- the unbanked was really not our customer, and the prepaid market was not our customer, and we learned that,” Squeri said. “But is there something in between our everyday credit card and the prepaid card? And that potentially could be a debit card. That all needs to be worked out.”
While AMEX figures out ways to plunder new customers, its worth recalling that we recently noted how millennials have also spent themselves into oblivion.
We wrote that the Covid recovery could be the last chance for those around the age of 40 to build the wealth they will need for their later years.
Most millennials, instead of basking in an incredible recovery and acutely focusing on re-bulding (or building for their first time) their finances, feel like 40 year old Kellie Beach, a real-estate attorney. She rode out the pandemic like most Americans: “I stayed afloat with credit cards. I was just used to swiping and overspending.”
Now that the government dole is running out and the Covid scapegoat is working its way (albeit, slowly) out of the discourse, it has become clear that it's time to pay closer attention to her finances. She told Bloomberg: “Now I have this feeling — like this fire — of urgency. I’m not going to be in this place again. I can’t wait to get out of this debt. I can’t wait to save up for my emergency fund and invest again.”